HIGHLIGHTS

More than 100 producers still await federal permits to allow lower-cost outdoor production

Aurora, Tantalus use rainwater with recapture systems

In a race to slash production costs and expand market share, Canadian cannabis growers are cutting expenses and carbon footprints with energy-efficient technologies, while some have gone so far as to capture rainwater and reuse the heat that develops in their facilities.

Canadian LPs are on the cusp of fierce pricing competition as more countries legalize medical marijuana. But in Canada, below-freezing winter temperatures make growing cannabis an energy-intensive operation, especially when compared with countries close to the equator that can harness natural sunlight and warmth on low-cost outdoor farms.

So even while more than 100 producers still await federal permits to allow lower-cost outdoor production during the warmer months here, most operations are enclosed and require expensive energy bills to heat, cool, light, and circulate air in order to mimic the plant’s natural environment and spur the development of specific qualities.

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“For power, light is the number one consumer of energy in cannabis operations. The light is actually the heat. The number two power consumer is air conditioning that has to counteract so much heat coming off the light,” said Paolo Pincente, chief executive of growratio, which designs technology for grow rooms.

So growratio developed a smart LED light, of sorts, with built-in sensors that keep track of things like temperature, humidity and carbon dioxide levels.

“It’s creating what we call custom recipes for growing specific strains of cannabis or eliciting specific outcomes from the plants,” Mr. Pincente said.

“With our system, we’re able to reduce energy consumption by up to half, versus a traditional building setup.”

Older types of lights, such as high pressure sodium bulbs, produce so much heat that air conditioning is then required to lower the facility’s temperature, he said.

While growratio’s technology – the NLN-1 series – is more expensive than simpler systems, Mr. Pincente said the cost savings on aspects such as electricity equate to a return on this investment within 1-1/2 years.

“People’s perceptions are changing and everybody’s got to look at their costs. Just by nature of less heat and the better spectrum, we’re actually getting better results in addition to the energy savings,” he said.

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Aurora Cannabis Inc., one of Canada’s biggest growers, said this week it is expanding its glass-roofed facility in Medicine Hat, Alta., to 1.62 million square feet with expectations to harvest 230,000 kg of medical product annually. It benefits from some natural light, and has a rainwater and snow melt recapture system.

Small cannabis grower Tantalus Labs is on track to harvest up to 3,000 kg a year in its 75,000-square-foot greenhouse in B.C.’s Fraser Valley. While greenhouses still require some artificial lights to stretch out the short winter days – cannabis typically requires around 12 hours of light daily – the sunlight that reaches this greenhouse means the company uses 90 per cent less electricity for lighting than would be required in an indoor facility, said Tantalus Labs chief executive Dan Sutton.

Like Aurora, Tantalus captures rainwater for its own needs, but this was a costly venture at nearly $500,000.

“It’s holistic. The rainwater is one component to pure inputs,” Mr. Sutton said.

“We are sequestering carbon negative production. We do use a bit of electricity through our lights and fans; that’s generated by hydroelectric power. We also use some natural gas that has a small carbon footprint.”

Based on the carbon that’s sequestered by the plants as they grow in its greenhouse, Tantalus’s calculations show the company’s production is “beyond carbon neutral” and the company intends to remain carbon negative, he said.

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“It is likely that we have slightly less production than an indoor environment but indoor environments harvest smaller plants,” Mr. Sutton said, differentiating completely enclosed operations from greenhouses that utilize natural sunlight.

“It’s substantially more cost efficient to cultivate in a greenhouse. However, there are aspects of our system, such as nutrient inputs, that we invest substantially in.”

Cannabis grower Flowr is ramping up both construction and production in Kelowna, B.C., with expectations to harvest 10,000 kilograms annually when operations reach full capacity. The LP opted to build small, contained growing rooms to ensure quality and is studying different ways to reduce its carbon footprint.

“We’re reusing that heat [produced] in other areas of the facility. We can take it and use that heat to heat another area, to help dehumidify other areas, so there’s a lot of efficiency,” said Tom Flow, chief executive of Flowr, adding that hydroelectricity is not a major part of operational expenses.

“We really look at a controlled indoor cultivation as the only way to produce a really high quality craft cannabis.”

Still, Flowr is considering greenhouse growing options in order to lower production costs for cannabis that would be destined for the extraction market.

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Several producers aim to sharply reduce costs by growing cannabis outdoors, though Health Canada has not yet granted permission to a single company. While some companies hope to market dried flower products as “sun grown” while saving significantly on production costs compared with indoor growing, the majority is expected to be a low-cost way to grow pot destined for the extraction market that requires lower quality product.

Even companies down the supply chain are starting to market environmental aspects to customers. U.S.-based Dixie Brands makes cannabis edibles and plans to enter this market in Canada when it is legalized later this year. This week the company announced it has partnered with non-profit One Tree Planted and will donate US$1 from each product purchase on April 20, more commonly referred to as 4/20.

Dixie, which aims to open six more U.S. facilities, has vowed that its operation will be Clean Green Certified by 2020 and said it is committed to switching all light fixtures at its facilities to LED, closing production facilities one day each week to conserve energy and offering a US$500 annual credit to employees that own electric cars.

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